1966 (2) TMI 68 - HC - VAT and Sales Tax

Summary

Issues:
1. Validity of the assessment order by the Deputy Commissioner of Sales Tax.
2. Interpretation of rule 33(1) of the General Sales Tax Rules.
3. Jurisdiction of the Deputy Commissioner to issue notice after the lapse of three years from the close of the assessment year.

Analysis:
1. The petitioner, a licensee under section 9 of the General Sales Tax Act, submitted a return for the year 1955-56 claiming exemption as a commission agent. The Sales Tax Officer granted exemption, imposing only a license fee. However, more than three years later, the Deputy Commissioner assessed the petitioner on the entire turnover, leading to a series of appeals. The High Court, in T.R.C. No. 45 of 1963, set aside the assessment orders as unsustainable, emphasizing the importance of rule 33(1) in completing assessments before 31st March of the relevant year.

2. The High Court clarified that the earlier judgment was misinterpreted, stating that any fresh assessment post 31st March, 1959, was invalid as per rule 33(1) of the General Sales Tax Rules. The Court highlighted that the turnover for the year had escaped assessment, and no action could be taken after the lapse of three years from the assessment year's close. Therefore, the Deputy Commissioner's actions post-March 1959 were deemed without jurisdiction, leading to the dismissal of the assessment orders.

3. The Court affirmed that the assessment orders by the Deputy Commissioner, which were based on a notice issued after the three-year limit, were legally unsustainable. The judgment emphasized the importance of adhering to statutory timelines for assessments and the jurisdictional limits of tax authorities. Consequently, the petition for reviewing the order was dismissed, with no costs imposed, as the original assessment was found to be in violation of rule 33(1) and lacking jurisdiction due to the timing of the notice served on the assessee.